Gold has been confined to a very narrow range in the holiday shortened week. Tests of the upside have been limited by by the highs of of the previous two weeks at 1737.64 and 1738.35, while tests of the downside have attracted buying interest ahead of 1700.00.

Activity in the gold market has also been constrained by persistent uncertainty on several fronts, which has prompted on-again/off-again risk appetite: Escalating tensions in the Gaza strip have been interspersed with cease fire rumors. Similarly, we have heard repeatedly that the troika and Greece are on the verge of an agreement that will free up the next aid tranche, only to see those hopes dashed.

On Monday we heard that a tentative deal had been stuck and that would have cleared the way for Greece's next €44 bln, the details of which would be forthcoming the following day. Yet, here it is Wednesday; no details have been announced, and in fact, recent reports seem to suggest that a deal remains illusive. The troika has become quite masterful at managing market expectations, even as they continue to fail miserably at managing the crisis itself.

Here in the U.S., we continue to hear warm, fuzzy talk of compromise on the 'fiscal cliff.' In reality though, the two parties don't really seem to be any closer to any kind of bipartisan agreement. The President called for an additional $1.6 trillion in tax revenue over the next decade in his opening gambit. That's likely far more than Republican's are willing to concede and in fact it's double what was on the table during the debt ceiling crisis of 2011.

Perhaps that's reflective of how these crises become increasingly expensive with every kick of the can down the road. And yet, another kick of the can is the most likely outcome; buying a little more time without truly addressing the underlying issues that are driving all these crises.

While all the uncertainty and mixed messages have kept gold narrowly confined this week, the underlying fundamentals of the market remain sound. Most notable are expectations that the central banks of the industrialized world will maintain their super-accommodative monetary policy stances for some time to come. Competitive currency debasements are likely to persist, amid the beggar thy neighbor efforts of governments to secure export share. This in turn will continue to drive investment in gold, both by individual investors and the central banks of emerging countries, seeking to hedge their exposure to devaluing fiat currencies.

We at USAGOLD are thankful for all of our clients and friends. Happy Thanksgiving